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July 21, 2000

Council plans testimony on workers' comp's 'special funds'

The Business Council is planning to testify Sept. 6 in Albany at a hearing of the Governor’s Workers’ Compensation Special Funds Study Commission, said Kerry Kirwan, The Council’s workers’ comp specialist.

In its testimony, The Council will likely outline a range of possible changes, from reforms to contain the costs of the funds to complete elimination of the most costly fund, the “second-injury fund,” Kirwan said.

The Governor's Workers Compensation Special Funds Study Commission has scheduled a series of hearings on the special funds administered in the workers' compensation system. The Albany hearing is at 10:15 a.m. Wednesday, Sept. 6, in Meeting Room 1 at the Empire State Plaza.

The state Workers Compensation Board administers 10 different special funds for various purposes. All employers support these funds by paying a surcharge on their workers' compensation premium. This surcharge, called an "assessment," supports both the special-purpose funds and the administrative costs of the Workers Compensation Board.

The largest and most costly of the special funds is the "second-injury fund," which was created after World War II to encourage employers to hire returning veterans. This fund was intended to provide some workers' comp benefits to veterans who were injured during the war and later disabled by a second, related injury.

In recent years, employers have grown increasingly concerned about the costs of these funds in general, and of the second-injury fund in particular. The Council's workers' compensation committee is reviewing the funds closely, and is asking members for input on their experiences with this fund.

Largely as a result of workers comp reforms enacted in 1996, employers' premiums have been declining. However, assessments, the second component of employers' overall workers' compensation costs, have been increasing, and New York state's overall comp costs remain significantly above the national average.

In 1999, Governor Pataki created the Workers Compensation Special Funds Study Commission to review the special funds and recommend possible reforms. Patrick McLaughlin, training manager for UPS for upstate New York, represents The Business Council on that commission.